New CBO Report: Up to 2 Million People Still Owe Their Jobs to the Recovery Act

A new Congressional Budget Office report finds that the 2009 Recovery Act is continuing to save jobs and protect the economy from what would have been a much deeper recession, as our updated analysis explains.

The Recovery Act achieved its primary goal of protecting the economy during the worst of the recession.  The CBO report finds that the act’s impact on jobs peaked in the third quarter of 2010, when up to 3.6 million people owed their jobs to it.  Since then, its job impact has gradually declined as the economy has improved and certain provisions have expired.

Still, even as of the fourth quarter of 2011, the Recovery Act:

• increased the number of people employed by between 300,000 and 2 million,
• increased real GDP by between 0.2 percent and 1.5 percent (see chart below),
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• reduced the unemployment rate by between 0.2 percentage points and 1.1 percentage points (see chart below), and
• boosted the number of “full-time-equivalent” jobs by between 400,000 and 2.6 million, both by saving jobs and by boosting the number of hours worked. (Without the Recovery Act, many full-time workers would have been reduced to part-time status and fewer would have worked overtime.)

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For these and other charts on the economy, see our chart book.